Social Security Crisis: The 2025 Social Security Trustees Report has shared some serious news. The report warns that the money in the Social Security trust funds is running out faster than expected. If things stay the same and no action is taken, the trust funds that support both retirement and disability benefits will be empty by the year 2034. That’s one year earlier than what was predicted in the last report. After that happens, Social Security would only be able to pay 81% of promised benefits using incoming taxes and money.
Frank Bisignano, the current Social Security Commissioner, said, “Immediate congressional action is needed to safeguard the system for the 185 million wage earners and 70 million-plus beneficiaries reliant on it.” That means lawmakers have to fix the problem soon or millions of people will feel the impact.
The cost of doing nothing could be very big. If benefits are reduced because of the money shortage, retirees could lose as much as 23% of what they get every month. According to a study by PensionBee, to make up for this loss, someone would need to save an extra $138,000 on their own.
Even a smaller cut of 19% would still mean people need about $114,000 more in savings. Right now, the average American only has $87,000 in retirement savings. That means many could struggle to afford basic needs in retirement if benefits go down.
SSFA Law Changes
One of the reasons the Social Security trust fund is expected to run out sooner is a new law passed in early 2025. This law is called the Social Security Fairness Act (SSFA), and it was signed during the last few months of President Biden’s term.
The law expanded who can get Social Security by allowing around three million public workers like teachers, police officers, and firefighters to qualify for full benefits. Before this law, two old rules the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) used to lower their benefits if they also received a public pension. But now those rules are gone.
Because of this change, many people who were not getting full Social Security checks before are now getting more money. And it didn’t just start in 2025—it was made retroactive from January 2024. By March 2025, about 1.1 million people had already been paid a total of $7.5 billion in back payments, which comes out to around $6,710 per person.
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While this new law helps a lot of public workers, it also adds more stress on the already struggling Social Security system. The Congressional Budget Office has said that the SSFA will cost the government around $196 billion over the next 10 years.
Social Security is not going to completely run out of money. People will still receive checks. But if nothing is done soon, those checks will be smaller. The system has already been spending more than it earns for years. In 2024 alone, Social Security paid out $1.48 trillion in benefits and costs, but only collected $1.42 trillion in income. The trust fund’s total reserves dropped by $67 billion last year and now stand at $2.72 trillion.
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